Financial review

2024 Financial performance

The operating activities of TMF Group are fully consolidated in the financial statements of TMF Group Holding B.V. from the date when control is transferred. As a result, the results and cash flow of TMF Group included in the consolidated financial statements of TMF Group Holding B.V. as comparative information to 2024, cover the period of 1 April 2023 until 31 December 2023; therefore 2023 financial information (results and cash flow) of TMF Group Holding B.V. includes nine months of consolidated results of TMF Group in addition to transaction costs incurred in the first three months of 2023. 

The comparative financial information presented has been augmented by adding the full twelve months financial performance of the operational entities of the TMF Group for 2023. This financial information has been adjusted to allow for a like-for-like comparison and reconciliations are included in the tables presented in the Financial review section. The primary operations are a result of the TMF operating entities; therefore the Q1 2023 financial information of the TMF operational entities is included. Refer to the key performance indicators (KPI) table on page 22 for explanations and definitions.

In 2024, TMF Group grew both organically and through acquisitions in line with our stated strategy. TMF Group acquired 8 companies in 2024.

TMF Group’s reported revenue increased by 11.7% to €906.7 million (2023: €811.6 million) on a constant currency basis. When adjusted for acquisitions during 2024, organic revenue grew by 9.4%. All regions and service lines contributed to organic growth during 2024.

Results from operating activities before depreciation, amortisation, impairment charges and non-underlying and separately disclosed items (“EBITDA”) increased by 13.6% to €285.2 million (2023: €250.9 million) on a constant currency basis, driven by organic growth and margin initiatives, as well as the contribution from acquisitions. Adjusted for acquisitions during 2024, organic EBITDA grew by 10.9%. Cash generated from operations excluding cash flow from non-underlying and separately disclosed items (“Cash generated from operations”) decreased by €13.2 million to €151.4 (2023: €164.6 million) due to one-off decrease in working capital from the global D365 roll out. The Senior Secured Net Leverage ratio to EBITDA for covenant calculation was 4.7x on 31 December 2024 (2023: 4.8x).

• Continued revenue growth

• Strong contracted book and improved retention

• Further EBITDA step up

• Volume and efficiencies gain

• Investments in Funds and Capital Markets

• Increased working capital to fund growth, acquisitions and delayed invoicing D365 related

• Step up in capex, including licenses following accelerated investment in digitisation and global roll outs

Key Performance Indicators

Income statement

Footnotes are explained on page 22.

Overall revenue growth of 11.7% (2023: 14.5%) on a constant currency basis includes the in-year impact of 2024 acquisitions of €18.4 million. Adjusted for the acquisitions, revenue growth in the year 2024 is 9.4% (2023: 12.8%).

Because of TMF Group’s global operations, several countries operate in currencies other than the Euro. Consequently, TMF Group is exposed to translation impacts as local currencies are translated into Euros. December 2023 revenue of €825.8 million, restated using 2024 rates, results in lower revenue of €14.2 million.

Employee benefit expense is driven by a 8.0% growth in FTEs, resulting from growth including acquisitions and by a 2.3% increase in average employee expense.

EBITDA, on a constant currency basis, improved by €34.3 million from €250.9 million in 2023 to €285.2 million in 2024. This EBITDA gain stems from revenue growth, margin initiatives, cost control and the contribution from acquisitions.

Revenue by service line

Footnotes are explained on page 22.

Revenue by geographic segment

EMEA

EMEA includes the markets: Netherlands and Curacao (NC); Luxembourg, Germany, Switzerland (LGS); British Isles (BI); Nordics; South West Europe; South East Europe; Central Eastern Europe; and Middle East and Africa. Revenue in EMEA increased by €40.3 million, or 8.7%, to €502.2 million in 2024 from €461.9 million in 2023. This growth is driven by double-digit growth in BI, South West Europe, Middle East and Africa, as well as single digit growth in other markets. The revenue includes the effect of the 2024 acquisition of the business of €6.3 million. Excluding the impact from acquisitions, the year-over-year growth amounts to €34.0 million, or 7.4%.

APAC

APAC includes the markets: South East Asia; Hong Kong; Korea & Japan; China & Taiwan; and Singapore, Malaysia and Australasia (SMA). Revenue in APAC increased by €21.3 million, or 11.3%, to €209.2 million in 2024 from €187.9 million in 2023. Growth is mostly driven by South East Asia (double digit) and single digit growth from other markets. The revenue includes the 2024 acquisition of the business of €4.2 million. Excluding the impact from acquisitions, the year-over-year growth amounts to €17.1 million, or 9.1%.

Americas

Americas includes the markets: North America; Brazil; South Spanish Latam; and North Spanish Latam. Revenue in Americas increased by €32.3 million, or 22.4%, to €176.3 million in 2024 from €144.0 million in 2023, mainly driven by double digit growth in South and North Spanish Latam and North America. The revenue includes the effect of the 2024 acquisition of the business of €7.9 million. Excluding the impact from acquisitions, the year-over-year growth amounts to €24.4 million, or 17.0%.

Cash flow

Cash flow from operating activities is calculated as: EBITDA⁶ adjusted for the impact of foreign exchange rates, cash inflow/(outflow) from working capital, cash outflow from lease payments and capital investments. TMF Group Holding B.V. presents IFRS 16 Office leases, including payments for buildings and vehicles, amounting to €33.5 million; €14.4 million of lease payments related to IFRS 16 software and hardware is reclassified to the Capex (including licenses) line of the cash flow.

The primary management KPI for cash generation is the percentage of EBITDA converted into cash. Cash flow conversion is calculated as EBITDA plus or minus working capital movement minus capital expenditure minus lease expenses (IFRS 16) divided by EBITDA. In 2024 the cash flow conversion rate of 53.1% was achieved, compared to 65.6% in 2023.

The cash flows from operating activities are adversely impacted by one-off decrease in working capital from the global D365 roll out and step up in Capex, mostly related to accelerated investments in the development of software, licenses and equipment.

Financing and treasury activities

TMF Group’s treasury function is responsible for ensuring the availability of cost-effective financing, managing TMF Group’s financial risk arising from currency, interest rate volatility and counterparty credit. Treasury is not a profit centre and is not permitted to speculate in derivative financial instruments. The treasury policies are set by the Management Board. Treasury is subject to controls appropriate to the risks it manages.

TMF Group’s activities expose it to a variety of financial risks: market risk (including currency risk and cash flow interest rate risk), credit risk and liquidity risk. TMF Group’s overall financial risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on TMF Group’s financial performance.

Financial risk management is carried out by the central treasury function under instruction and with approval of the Management Board. TMF Group’s treasury function identifies, evaluates and hedges (where considered necessary) financial risks in close cooperation with TMF Group’s operating units. The Management Board  provides guidelines for overall financial risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments and investment of excess liquidity.

Financing

TMF Group’s primary sources of finance are secured bank borrowings provided by a syndicate of banks.

The revolving facility from our primary bank consists of a €156.7 million (2023: €152.0 million) facility for cash needs, of which €156.7 million (2023: €152.0 million) is undrawn, and a €24.3 million (2023: €29.0 million) facility for bank guarantees, of which €6.7 million (2023: €10.0 million) is not used. As at 31 December 2024, the total undrawn borrowing facilities amounted to €163.4 million (2023: €162.0 million).

Foreign currency

TMF Group has many foreign subsidiaries that are exposed to various currencies. Treasury policy is to manage significant balance sheet translation risks in respect of net operating assets and profit denominated in foreign currencies. The methods adopted are the use of borrowings denominated in foreign currencies to the extent that cash and debt requirements allow.

Cash management

Local cash balances are centralised into a cash pool with HSBC as much as effectively possible. Countries that are not permitted to participate in the cash pool regularly upstream cash by settling intercompany balances, dividends or loans.

The cash pool consists of overdraft balances offset by credit balances (“Secured bank overdraft”) and is managed on a net surplus basis. Interest compensation is applied to the individual accounts within the cash pool.

TMF Group’s treasury function monitors cash balances daily. Appropriate action is taken to optimise interest costs, while at the same time safeguarding sufficient liquidity. TMF Group continues to review opportunities to improve the efficiency of its cash management, including improved Global credit control and standardised processes which will result in a decrease in lock-up (trade receivables, unbilled services and deferred income) days. 

Outlook 2025

We expect TMF Group to continue to grow both organically and through acquisitions. Growth is expected to continue to come mostly from existing clients by geographic expansion. We also expect new services, like those resulting from ESG (environmental, social and governance), as well as acquisitions to contribute to growth.

To support this growth, the number of FTEs is also expected to further increase. Our employees are continuing to work partially remotely and hence we have significantly reduced our office space and will continue to do so. We expect remote working to continue and be a permanent feature of the professional services industry.

Through successful repricing and refinancing in 2024 and 2025, we have received positive market signals from banks, highlighting TMF Group's performance and resilience. 

Furthermore, we have planned further investments in capital expenditure, both to support client delivery as well as investment in TMF Group backbone systems. Those future investments can be funded within the existing (renewed) borrowing facilities. In case of potential larger-scaled acquisitions TMF Group will assess if additional borrowing facilities are required.

Subsequent events

On January 2, 2025, ADIA transferred all shares held in TMF Group Holding B.V. to Tucano Holdings Jersey Limited, and at the same time acquired shares of Tucano Holdings Jersey itself. With this transfer, Tucano Holdings Jersey Limited holds the majority of the shares issued by TMF Group Holding B.V.. There were no changes for the shares held by Stichting Administratiekantoor Management Sapphire. CVC (Tucano Topco Jersey Limited) and ADIA hold an equal number of voting shares of Tucano Holdings Jersey Limited. The members of the Management Board and the Supervisory Board of TMF Group Holding B.V. have resigned at the date of transfer and, at that same date, were appointed as directors of Tucano Holdings Jersey Limited. Tucano Holdings Jersey Limited has now a one-tier Board, comprising of two executive directors and eight non-executive directors. The shareholders of TMF Group Holding B.V. have reappointed a Board of Directors consisting of Patrick de Graaf and Natalija Kuzović at the transfer date.

On 2 January 2025 TMF Group acquired 100% shares of RSM - Brazil.

On 31 January 2025 TMF Group acquired 100% shares of Operadora PLC, S.C - Mexico. 

On 19 February 2025 TMF Group acquired 100% shares of Executive Wealth Management AG - Switzerland.

The acquisitions are driving our strategic and operational performance. Due to the recent closing date, additional IFRS disclosures cannot be made until the initial accounting for the business combination, including contingent consideration, has been completed.

In January 2025, the repricing of senior loans consisting of Total Facility B1 of €1.055 million and Total Facility B3 of $398 million was finalised. Total Facility B1 of €1,055 million became Total Facility B5 consisting of €1,055 million, and Total Facility B3 of $398 million became Total Facility B4 consisting of $396 million at the repricing date. The interest of Total Facility B5 is 3.25% plus 3 or 6 month EURIBOR (floored at 0%). The interest for Total Facility B4 is 2.75% plus 3-month USD TERM SOFR CME. On 13 February 2025, TMF Group had taken out additional $100 million under Facility B4. This repricing did not have an impact on extinguishment accounting. 

Conclusion

In 2024, TMF Group delivered revenue growth of 11.7% (2023: 14.5%) and EBITDA improved by €34.3 million to €285.2 million (2023: €250.9 million). With that, we have again delivered a solid set of results and 2024 has evidenced yet again that our strategy is paying off. Despite the challenging geopolitical and economic environment, we are confident that in 2025 we will further accelerate our growth and profitability.

Patrick de Graaf | Chief Financial Officer

• From 2 January 2025, Tucano Holdings Jersey Limited is majority shareholder of TMF Group Holding B.V.; the members of the Management Board and the Supervisory Board of TMF Group Holding B.V. have resigned at the date of transfer and, at that same date, were appointed as directors of Tucano Holdings Jersey Limited.